Unmarried couples

Moving in together is an exciting time. Often, this will involve one party moving in with another person who already owns their own property. Whatever the circumstances, it is sensible and often in the parties’ best interests to enter into a ‘Living Together Agreement’ (Cohabitation Agreement) to record who is to be responsible for certain payments, the level of financial contribution expected by each party, how the property is to be owned moving forward, rights of occupation and what should happen in the event that the relationship breaks down. Cohabitation Agreements are increasingly popular and serve to minimise any stress caused by the uncertainty of future unknowns.

The law concerning unmarried couples operates differently to those that are married. When an unmarried couple separates, there is no automatic entitlement for financial assistance (relief) from one party to the other. This includes a division of both capital and pension assets. Unlike married couples, those that are unmarried are unable to secure a Pension Sharing Order to secure financial provision in retirement.

The Family Courts apply a very different approach and instead look to determine whether a trust has arisen between the parties.

In the first instance, the Court will consider how the property is owned according to the Land Registry Title Deeds. If a property is owned as Joint Tenants, there is a presumption that the property is owned as a whole by both parties, regardless of their respective contributions (or lack of). If the property is owned as Tenants in Common, then the Court will apportion a value to each party’s share based on all other available evidence. This is usually referred to as an Express Trust, although an Express Trust may also be verbal if the parties are in agreement.

If the property is owned in one party’s name, then the other party seeking to make a claim against the property will need to show that either there is there was some form of ‘common intention’ between the parties that he/she would have a beneficial interest in the property. Alternatively, the party seeking to assert an interest would have to rely upon the principle of ‘proprietary estoppel’.

Proprietary estoppel usually arises in situations where a property owner encourages another to act to their detriment in the belief that they will obtain a beneficial interest in the property. In order to rely upon proprietary estoppel, the claiming party will need to prove that:

• An assurance or representation was made to encourage/allow the claimant to believe that they have or will have a benefit in/right over the property;
• The claimant relied on the assurance/representation;
• The claimant has suffered a detriment as a result of their reliance; and
• It would be ‘unconscionable’ for the property owner to go back on the assurance/representation.

Engaged couples may have some additional options such as –

• An application under Section 17 of the Married Women’s Property Act 1882 – which will enable a successful claimant to seek compensation for an asset in which they had a beneficial interest in, if it has been disposed of by the other partner within a three year period since the engagement was broken off or;
• An application under Section 37 of the Matrimonial Proceedings and Property Act 1970 – where a party has made a substantial contribution in money (or money’s worth) to the improvement of real or personal property. In such circumstances, there tends to be an automatic presumption of an interest rather than the approach adopted under the trust law principles referred to above.

Breaking up is never easy, but for some unmarried couples, there can be a huge amount of uncertainty when it comes to living arrangements post separation. As an unmarried couple, a party does not have an automatic right to occupy a property unless he/she is named on the title deeds or lease (rental agreement).

Whilst no one wants to ‘plan for the worst’, a Separation Agreement helps to avoid any unnecessary stress should a relationship later breakdown. A Separation Agreement can specify how the contents of a property should be divided, who is responsible for paying what, any arrangements for a period of adjustment post-separation and how any pets of the family are to be shared etc in the event that the relationship breaks down.